Women in the Boardroom: Should the U.S. Have Quotas?

Norway’s quota required that publicly-held companies raise the percentage of women on boards from 9 percent in 2006 to 40 percent by 2008; a very ambitious target in a very short window. A University of Michigan study makes the case that forced diversity in Norway hurt stock price. In the three days following the announcement of the quota, stock prices fell 5 percent for companies that had no women directors. Cited as a reason why quotas don’t work, it is too soon to know the full impact of Norway’s actions to increase the representation of women on boards. There are also many other ways to create and implement quotas. More study is needed.